Introduction
The objective behind interpreting laws is to clarify the ambiguous words and their meaning according to the intention of the legislation. There are certain principles of interpretation which are exercised by the Courts for interpretation of statutes. In this Article, a detailed discussion will be on a legal maxim namely “Expressio unius est exclusio alterius”, which is used as one of the rules for interpretation of statutes.
Literal meaning of Expressio unius est exclusio alterius
The literal meaning of this maxim was discussed by the Hon’ble Supreme Court in the case of GVK Industries Ltd. vs. ITO [2011] 332 ITR 130 (SC) which is as follows:
the express mention of one thing implies the exclusion of another
This maxim indicates that when something is expressly mentioned in a statute, it leads to the presumption that the things which are not specified in the statute are excluded. Accordingly, this maxim is based on the rule: Express mention and implied exclusion.
Effect of the maxim
The effect of the maxim is that if a list of words appearing in an act or legislation are specific in nature and are not followed by general words then that act/legislation will only apply to the words appearing in the list.
In other words, there are 2 conditions which need to be fulfilled cumulatively in order to apply this maxim for interpretation of statutes which are as follows:
Condition No.1 – The list of words appearing in a statute should be specific in nature
And
Condition No.2: Those specific words should not be followed by general words
Let us understand the applicability as well as non-applicability of the maxim with 2 hypo thecal examples.
Example No.1
For example, a particular provision of an Act requires contract for sale of goods, wares and merchandise to be in writing if they are above a specified value.
Here the list of words appearing in the provision are “goods, wares and merchandise”. These words are specific in nature and these specific words are not followed by any general words. Consequently, the twin conditions for applicability of the maxim are fulfilled cumulatively.
Therefore, by applying the maxim, it can be construed that the said provision would only apply to contract for sale of goods, wares and merchandise. The provisions of the act will not apply to contract for sale of stocks or shares because the express mention of specific words i.e. goods, wares and merchandise leads to a presumption that stocks or shares which are not mentioned in the statute are excluded.
Example No.2
For example, a legislation mandates registration of cars, trucks, tractors and other motor-powered vehicles.
Here, the list of words i.e. cars, trucks, tractors are specific in nature but those specific words are followed by general words i.e. other motor-powered vehicles.
Accordingly, one of the condition precedents i.e. the specific words should not be followed by general words is not fulfilled. So, the rule of express mention and implied exclusion enshrined in the maxim will not apply in the given case. Therefore, the said legislation compelling registration which is applicable to cars, trucks and tractors would equally apply to bikes which is another type of other motor-powered vehicles.
Ritz Suppliers (P.) Ltd. vs. ITO [2020] 113 taxmann.com 349 (Kolkata – Trib.)
Kolkata Bench of Income Tax Appellate Tribunal in the case of Ritz Suppliers (P.) Ltd. vs. ITO had dealt with an issue by applying the legal maxim Expressio unius est exclusio alterius.
Issue under consideration was that whether section 50C(1) of the Income-tax Act, 1961 can be invoked in respect of transfer of leasehold rights in land or building.
As per sub-section (1) of section 50C, where the actual value of consideration accruing to assessee on account of transfer of capital asset being land or building or both is less than the stamp duty value assessed by stamp valuation authority then the stamp duty value so assessed shall be deemed to be full value of consideration for the purpose of computation of capital gain under section 48.
“50C. (1) Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (hereinafter in this section referred to as the “stamp valuation authority”) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be full value of the consideration received or accruing as a result of such transfer.”
Observation of the Tribunal
For determining that whether the deeming fiction created by section 50C will apply to leasehold rights in land and building or not, the Tribunal found it suitable to apply the maxim Expressio Unius Est Exclusio Alterius to the case under consideration.
The Tribunal observed that the deeming fiction of treating stamp duty value as full value of consideration extends only to specific list of capital assets appearing in section 50C which are land and building.
The words ‘land or building’ appearing in section 50C are specific in nature and are not followed by general words. Thus, it can be seen that twin conditions of applying the maxim are fulfilled.
Decision of the Tribunal
By applying the maxim, the Tribunal concluded that the deeming fiction created by section 50C cannot be extended to any asset other than those specifically mentioned therein. So, it can be construed that the express mention of land and building leads to a presumption that leasehold rights which is not mentioned in section 50C is excluded.
Consequently, it was held that section 50C applies only to transfer of land and building and it cannot be made applicable to transfer of leasehold rights in land or building.
From this it can be inferred that actual value of consideration received on account of transfer of leasehold rights in land or building can only be treated as full value of consideration for the purpose of computation of capital gain.
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